The Federal Reserve’s Recent Interest Rate Hike
This Wednesday, the cryptocurrency market saw some growth after the U.S. Federal Reserve announced a 75 basis point increase in its policy rate, bringing it to a range of 2.25-2.5%. This move was in line with market expectations, as the U.S. Bureau of Labor Statistics reported a 9.1% rise in the Consumer Price Index for June, a 40-year high, despite the Fed’s efforts to combat inflation.
Marcus Sotiriou, an analyst at the crypto brokerage GlobalBlock, stated that a rally in the cryptocurrency market could follow if the Fed’s rate hike met expectations. Bitcoin, in particular, has historically reversed its course after rate announcements that align with market forecasts. Sotiriou added:
“Every Fed meeting this year has resulted in a positive market reaction to the rate decision. There’s a high likelihood that Fed Chair Jerome Powell will signal a return to a 50-point hike in the next meeting if growth slows and inflation eases, which would likely have a positive impact on the crypto market.”
The Potential for BNB Price Decline
However, the risk of a further downturn for the cryptocurrency market remains. According to a survey conducted by the Wall Street Journal, there is now a 49% chance of a recession in the U.S. within the next 12 months. Investors have grown more bearish in recent months, and if central banks continue their aggressive actions, this could lead to a global recession. In such a scenario, BNB and other cryptocurrencies could see a decline as investors move to safer assets.
It is worth noting that under the commonly accepted definition of a recession—two consecutive quarters of negative GDP growth—the U.S. may already be in recession, though we’ll need to wait for Thursday’s GDP report to confirm this.
BNB Coin’s Technical Analysis
After reaching a peak of over $450 in April 2022, BNB Coin has faced a more than 40% drop. The price has recently stabilized above the $250 support level, but a break below this threshold could signal that BNB might test the $220 mark.
In the chart below, I have marked the trendline. As long as BNB Coin’s price remains below this trendline, a trend reversal cannot be confirmed, and the price is still within the “SELL-ZONE.”
Key Support & Resistance Levels for BNB Coin
In this chart (dating back to October 2021), I have identified the key support and resistance levels to assist traders in understanding potential price movements. Binance Coin remains in the “bearish phase,” but if it surpasses the $300 mark, it could signal a trend reversal, with the next target being around $350. The current support level stands at $250, and if this level is broken, it will signal a “SELL” and could open the way to $220. If the price drops below $200, a strong support level, the next target could be $180.
Factors Supporting a Potential Price Rise for BNB
BNB Coin has gained over 20% since early July, climbing from $213 to $275. While it remains in the “bearish phase,” a move above $300 could signal a trend reversal, with the next target potentially around $350. Traders should also note that BNB’s price is closely tied to Bitcoin’s price, and if Bitcoin surpasses $25,000, BNB could reach $300 or even $350.
Indicators for Further Price Decline for BNB Coin
Economists have raised concerns about the possibility of a global recession, and many experts expect BNB Coin’s price to fall further. The price is currently stabilizing above $250, but a break below this level could indicate a potential test of the critical support at $200. As BNB’s price is correlated with Bitcoin, any downturn in Bitcoin’s price typically leads to a decrease in BNB’s value.
Expert and Analyst Price Forecasts for BNB Coin
BNB is experiencing an upward movement this Wednesday following the Federal Reserve’s announcement of a 75-basis point rate hike, bringing the federal funds rate to a range of 2.25-2.5%. The market had anticipated a 50% chance of a 1% hike, so the 0.75% increase has alleviated fears of a more aggressive 1% hike. However, the risk of a market decline is not eliminated, and a Wall Street Journal survey of economists now estimates a 49% chance of a U.S. recession within the next 12 months. The upcoming two months of the third quarter of 2022 may be challenging for Binance Coin, and Deutsche Bank suggests that cryptocurrencies could experience further declines if the U.S. economy slips into a recession. According to Mike Novogratz, CEO of Galaxy Digital, cryptocurrencies could drop more than 50% from current prices, while Chris Burniske, a partner at Placeholder Ventures, believes the crypto market may hit its bottom later in 2022.
